Monday, October 20, 2008

Downturn is bringing along with it other forms of casualty besides losing trillions of dollars. It is witnessing steep erosion of moral values. The moral fabric of companies and managers running has weakened. As they get jitterier, they tend to break away from promises made and don’t fight back within the respective hierarchy with the same ebullience as they would in good times.

The concept of morality and justice implies that commitments made in advance must be acknowledged even if it’s to one’s own disadvantage. To one’s own disadvantage is something we are not prepared to live. Why is our moral fiber built so tenuous that a simple sudden tension snaps it? Why do we people start tending to take decisions by popular demand than by principle?

Managers try to postpone or run away from the existing promises by blaming the ‘change in circumstances’? Changing times as a reason comes in handy in business like situation and everyone’s exploits that to cover his or her shortcomings in morality? We try looking for loopholes and escape routes for our commitments?

One of the reasons I have heard is ‘for the larger good’ we are doing this or have done this. We have started calling managers ‘smart’ based on who don’t follow these themes but what suits them.

Its in bad times that character gets tested and most may not come out in flying colors. Managers have always been preaching of how performance under stress is an important facet of leadership, but when it comes to crunch those very people in charge of leading it give away.

How devastating it can be for teams below, teams who carry an image of superiors as men and women of justice and integrity and companies as a place to practice that art? Image that’s built over years of professional careers comes crashing down with their contradictory acts. With the dark side let loose, it leads to breach in confidence and trust people have placed in the individual and the company.

Concept like trust, justice, fairness and morality, once lost is lost forever. It’s this emotion, which is fuelling the crisis. Liquidity and Solvency, yes, but the main reason is loss of trust leading to panic. Without trust, hell breaks loose and that’s what is happening.

This crisis will not go away soon and does that mean that ‘civil’ society will become increasingly ‘uncivil’. Doesn’t matter how much money you inject, how much surplus you create. None of it substitutes primordial emotions of trust and confidence.

This is the first downturn for majority of young professionals and the nastiest for the seasoned. The impression youngsters get or form on how their ‘seasoned’ bosses manage this crisis and whether decisions have elements of morality, justice and fairness will have a profound effect in shaping them up as future leaders in their corporate career.

Are only people to be blamed or is the state responsible for it as well? Unfortunate part is there is no state support structure in India for the society to lean upon, to survive such downturns. Will government give loans or aid to the parents so that their kids education doesn’t suffer? Absence of such support structure forces you to be selfish in your assessments and decisions. But still in the land of Rama and Raja Harishchandra who gave up everything for the sake of morality – morality at individual level is deteriorating everyday as the crisis deepens?

We all abhor corruption. But what about the ‘moral corruptness’ gripping us? What is the remedy? Leaders of every sphere will have to participate in according primacy to morality. Plato had proposed the creation of an educational system that focuses on the molding of character, with the ultimate goal of the educator being not just imparting knowledge, but also the ability “to turn the mind's eye to the light so that it can see for itself.”

We probably would have escaped this crisis with right philosophical foundations. Now with the damage done, it will be some time that confidence and trust gets restored. The recovery will hinge on how much we practice what we preach and we come out as better ‘cleaned’ individuals, holding our head high on moral grounds.

Friday, October 17, 2008

Came across a very relevant quote in todays context from Richard Feynman while reading one of his books/articles. He was a brilliant, leading post war theoretical physicist, a Nobel Laureate, a great teacher, terrific original thinker and writer. I quote :

"There are 10^11 stars in the galaxy. That used to be a huge number. But it's only a hundred billion. It is less than the national deficit ! We used to call them astronomical numbers. Now we should call them economical numbers. - Richard Feynman, physicist, Nobel Laureate ( 1918-1988)"

When seen in todays context of financial crisis which runs in trillions of dollars, this number looks even smaller. Next generation will probably start counting from $1BN, $2BN, $3BN....$100 BN. Had he been alive...he may have called them "Infant Numbers".

Monday, October 13, 2008

Yesterday Sensex lost 800 points and has been on the losing streak throughout the week. Same has been the case of Dow, Nasdaq, Nikkei, Hang Seng and all the other bourses across the world. On the other side Rupee is on a continuous decline since the crisis intensified.

Are we seeing worst of times? As finance professional the events are overwhelming. How deep this shit is? How long will it continue? How many participants will it gulp? What does it take to get the confidence of players back? Since nobody has clear answers it’s leading to fear. And fear has no rationality. Further it has dented the trust levels and trust has not substitute. Majority of the business is transacted on trust. Even at work, we deal with our colleagues on trust. If one were to have everything in writing, it would be nightmarish to work. But once you lose trust on someone, then the team cracks. That’s what is happening in the financial markets. With trust taking a knock no amount of reassurance is working. It’s driving the stock markets throughout the world southwards. Every index has been shedding throughout last week leading to massive erosion of wealth and savings besides severe damage to investor confidence. Survival is becoming a big issue for most companies. But where is the Leadership in India to address these issues ?

I wrote sometime back that it appears a crisis of liquidity and not much of solvency. But slowly solvency concerns are catching up making it even worse. Rumours are running thick and fast. Slowdown is imminent. We need to accept it. Its first cycle for majority of the young Indians and they are finding it tough to digest. We are only 4-5 months into this turbulence and its already giving churns – what happens if this continues for another 1-2 yrs ? But how are pilots of this plane behaving ?

Central bankers have been making concerted moves but it seems they misjudged the extent and hence every move appears insufficient and poorly thought of. Indian situation is even more peculiar as just days back we were sucking liquidity from the system. Now it’s the other way round. Depreciating Rupee and inflation is not helping us either.

What is disappointing is the lukewarm and half-hearted response from the Indian authorities. It has been stale and reactionary. Further if we nurture ambitions of global leadership, then we need to lead from the front and provide visionary leadership. Most crises precede with signals and leaders pick that up early start acting. In this crisis signals were visible since 2007, unfortunately till recently we were not even acknowledging this issue, shrugging this off as a ‘rich country’ issue. We live in an interconnected and interdependent globalized world – then how could we believe that this crisis wouldn’t wound us.

This crisis had provided a unique opportunity to India to stand up and get counted and we let it go. Leaders are born and their characters get tested in crisis. We on our part chose not to even participate - that’s not leadership, especially when aspirations are high to play at a world stage. One needs to share the risk and rewards of being a world leader. Though we missed acting in crucial moments, its never too late. Next two weeks will be crucial. We need to be courageous in approach and action if we want to see Indian flag amidst US and European ones and replace someone in G-7 or may be form A-3 or 4 ( Group of Asian Tigers ).

Saturday, October 04, 2008

Oct 2nd, birthday of Mohandas Karamchand Gandhi, more popularly known as Bapu or Gandhiji, is celebrated as Gandhi Jayanti in India and International Non Violence Day, the world over.

Couldn’t have been timelier with bloodbath all around. Lets see whats happening around the country. India has been rocked by a series of deadly explosions starting Jaipur, followed by Bangalore, Ahmedabad, (failed ones in) Surat, Delhi and recently North-East leading to heavy casualties of life and property leaving trust and confidence in tatters. It has managed to instill fear in the minds of innocent citizens and has shattered peace. The whole intelligence and security apparatus has failed, rather failed miserably.

Yesterday Ratan Tata announced pull out from Singur. He cited violence, agitation and lack of cogenial atmosphere as the key reason. We can blame Mamta Bannerjee but this what Left has practiced for ages and getting taste of their own medicine. Rule-of-Law has been thrown to garbage bin.

Orissa and Karnataka are witnessing violence against Christians of worst kind. Both sides are to be blamed. Christian missionaries, flush with funds from foreign shores, for luring conversions in poor tribal belts and Hindus for retaliating with violence. In a civil society one has no business to retaliate by raping and killing people.

Parts of Chattisgarh, Andhra Pradesh and Bihar are hit by Naxal violence with parallel government running there.

I need not recount the J&K story. It has been worst hit by terrorism and every party has tried make most of the divide between Jammu and Kashmir and within Kashmir - within India and Pakistan. Month long Amarnath violence just got over, leaving even more bitterness.

North East under seize from local extremists.

Can it go worse than this? The entire country seems to be in grip of violence.

Don’t know how Gandhi must have felt, if he were alive, witnessing so many innocents getting killed in this mindlessness. One who couldn't even tolerate killing of oppresors -the 22 policeman at Chauri-Chaura - leading to him taking fast-unto-death to drive the non-violence discipline, would have taken to ‘samadhi’ for sure.

The causes remain the same what were prevalent in 1947. What our great leaders then worked to eliminate, political class of today have played it for narrow political gains. Anti-social elements have gained upper hand. Fractured conscience of our political class has given them legitimacy. Couldn’t believe that Manmohan Singh allowed every criminal to come out of jail, treated them as VIPs and allowed them to vote in the parliament to save his government. Why would they be afraid of law? Why would they fear an honest officer. Rather it will be the other way round. All those who sacrificed cushiness by not succumbing to corruption, worked honestly and tirelessly putting themselves and family to risk over years to get the criminal elements behind bars saw their efforts evaporating in seconds. Other parties fare no better. Nobody walks the talk citing political compulsions rather we are termed impractical. All of them are spineless. Their commitment to non-violence is over by releasing full page advertisements on this day and customary visits to Rajghat and wearing Khadi.

It comes handy to politicians and other leaders who want to hide their incompetence. We haven’t built a world class infrastructure, so ask people to refrain from road rage violence. We cannot take care of our internal security so we keep asking to citizens remain peaceful after every blast. We cannot eliminate corruption so we ask them to internalize.

Gandhism as a religion and philosophy is more relevant today than it was ever and needs to be celebrated. So how do we celebrate - by forcing shut-down of every single establishment? No entertainment complexes, no shopping complexes nothing is open? Why do we make it so dull? Urban families have no clue on what to do. Instead of enjoying the day, they start cursing as the day gets boring and stressful. Isn’t it violence of a kind – violence of authority? We need to make it lively; it’s a national holiday, and isn’t it a birthday after all. Birthdays are meant to be enjoyed with families and friends with pomp. That’s one way of spreading his philosophy. Munnabhai series has shown the way on how Gandhi’s ideology of truth and non-violence needs to innovatively presented to the current generation. Happiness and Joy go hand in hand with truth.